Life Insurance Corporation of India (LIC) has increased its stake in State Bank of India (SBI) by acquiring shares through the open market and also by way of participating in the recently-concluded qualified institutional placement (QIP).
According to a stock exchange disclosure, the insurance major acquired 2.13 crore shares of SBI between August 28, 2013, and February 5, 2014. LICís stake in SBI has now increased from 12.15% to 14.991%.
Last month, SBI raised Rs 8,032 crore by selling shares through a QIP, making it the biggest equity sale via this route. The bank sold 5.13 crore shares at an average price Rs 1,565 apiece, which was on the lower side of the price band it had set. After the equity allotment, the government stake will come down to 58.6% from over 62%.
According to reports, LIC was one of the largest investors in the QIP with many public sector banks also participating in the share sale with over Rs 2,000 crore worth of bids. Response from the foreign institutional investors (FIIs) was tepid.
While banking has been one of the most favoured sectors for the insurance major, SBI, the country's biggest lender, is not the top holding in LICís portfolio. LIC has a 22.54% stake in Corporation Bank. It also has holdings in excess of 10% each in Vijaya Bank, Bank of Baroda, Bank of India, Syndicate Bank, Union Bank and UCO Bank.